June 26, 2012

Canadian cow slaughters on six months decline

As Canada's cow-calf operators continue on rebuilding efforts, the country's cow slaughter has dropped below year ago levels for the past six months.

Canadian cow slaughter, from April 28 through to June 9, 2012, declined 7.6% on-year and 28% below the five-year average, while total steer and heifer slaughter also fell 2.4% on year ago levels and 7.8% below the five-year average.

The Canadian cattle herd rebuild has also been apparent in both the number and composition of cattle on feed. The latest survey showed feedlot inventory in Alberta and Saskatchewan (approximately 80% of all feedlot cattle in Canada) declined 8.8% on-year, to 844,443 head. Since the beginning of 2012, Canadian feedlots have placed 8% fewer cattle on feed than a year ago, but with a noticeable shift towards more placements of steers than heifers.

Despite the tight domestic cow supplies, the Canadian imported beef market has reportedly been trading mostly on spot, as end-users demand remained limited for forward purchases. Similar to the US market, imported grinding beef in Canada continued to trade at a significant discount to fresh domestic product. While Canadian lean grinding beef prices so far in June have increased 2% from May levels and averaged 8% above on-year, prices for round cuts (including eye-round and inside) have declined, influenced by increased availability of US products.